Kent County Council v Union Railways (North) Ltd.& Anor [2009] EWCA Civ 363

[2009] EWCA Civ 363

Case No C3/2008/1752

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE LANDS TRIBUNAL

THE PRESIDENT & MR A J TROTT FRICS

ACQ/212/2005 & ACQ/29/2006

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 01/05/2009

Before

LORD JUSTICE WARD

LORD JUSTICE KEENE

LORD JUSTICE CARNWATH

Between

KENT COUNTY COUNCILAppellant

UNION RAILWAYS (NORTH) LIMITED & ANRRespondents

Michael Barnes QC & Barry Denyer-Green (instructed by Messrs. Barlow Lyde & Gilbert LLP) for Appellant

Guy Roots QC & James Pereira (instructed by Messrs. Cripps Harries Hall) for Respondents

Hearing Hearing dates : Wed 25th & Thurs 26th March, 2009

Judgment

Carnwath LJ :

[1]In 2001 the Council, under compulsory powers, took possession of land owned by Blue Circle plc for the purposes of constructing a road. The line ran close to part of the proposed Channel Tunnel Railway Link (CTRL) at Ebbsfleet. For the purpose of constructing the CTRL, it was necessary for the Claimant Company to divert underground electricity cables owned and operated by Seeboard Plc. For this purpose the Company, so it is alleged, had previously acquired various property rights from Blue Circle, partly over land required for the road. Attempts to co-ordinate the two projects seem to have failed, for reasons which it is unnecessary to explore. The Company claims that, as a result of the implementation of the road project, it was unable to take advantage of these property rights, and the cables had to be temporarily diverted and then permanently laid across other land. The road is now built and in use.

[2]Before the Lands Tribunal, the Company claimed, as statutory compensation, the additional cost of these diversion works, together with the cost of delay to the CTRL project, which it puts at about £11.4 million. The Council contests both the existence and nature of the alleged rights, and the scale of the alleged loss. But it also takes a preliminary point. Prior to taking possession under the compulsory purchase order, the Council had duly served notices to treat and notices of entry on Blue Circle, but not on the Company. The Council argues that, even if the Company had potentially compensatable interests in the acquired land, it has no claim to statutory compensation, no steps having been taken by the Council to acquire those interests pursuant to the compulsory purchase order. Its rights if any are governed by the common law.

[3]In these circumstances the parties agreed two preliminary issues for determination by the Tribunal: i) Does the Lands Tribunal have jurisdiction to determine a claim for compensation where no notice to treat has been served in respect of the interest claimed by a claimant either because the acquiring authority have omitted to serve such a notice or because the acquiring authority contend that they did not need to acquire the interest that the claimant contends that he held? ii) Does the Lands Tribunal have jurisdiction to determine a claim for compensation where no notice to treat is served on a claimant and where the acquiring authority dispute the claimant’s interest or title and/or his entitlement to compensation?”

[4]In the light of the argument the Tribunal re-interpreted the issues as raising in effect three questions “(a) Whether an acquiring authority is entitled, if it chooses, not to serve notice to treat on the owner of an interest in land that it is taking under its compulsory powers. (b) Whether a claimant can make a reference to the Lands Tribunal if notice to treat has not been served on him. (c) Whether the Lands Tribunal has jurisdiction to determine the question of entitlement to compensation.”

[5]Its answers were respectively:(a) no,

(b) yes,

The claimed interests

[6]It is unnecessary for present purpose to go into the detail of the alleged interests. They are said to have been acquired from Blue Circle under agreements between the Secretary of State for Transport and Blue Circle, the benefit then being transferred by the Secretary of State to the Company. They are said to include: i) an option exercisable against Blue Circle to acquire a long lease of the seven parcels, the freehold of which was acquired from Blue Circle by the Council, ii) an easement exercisable against Blue Circle to lay underground electricity cables across that land, iii) an option exercisable against Blue Circle to acquire the freehold of that land, and iv) a licence which is said to have created some form of equitable interest over the same land.

[7]For the purposes of the preliminary issue it is sufficient to focus attention on the options, since there is no doubt that such interests if they existed would have entitled their owners to the service of notice to treat. The licence may not have given rise to a compensatable interest at all (cf Frank Warr & Co Ltd v LCC

[1904] 1KB 713

), but, if it did, it raises the same issues in principle as the options. By contrast an easement does not give rise to a requirement to serve notice to treat. It may be overridden to the extent necessary to implement the statutory scheme, and compensation payable accordingly (under 1965 Act, s 10).

[8]The distinction between an option and an easement is illustrated by Oppenheimer v. Minister of Transport

[1942] 1 KB 242

. The claimant owned an option to acquire three fields. Part of the fields was subject to compulsory purchase by the Minister to construct a new road. Notice to treat was served on the claimant, but the Minister then argued that it was unnecessary for him acquire the option since it would be extinguished by the compulsory acquisition, by analogy with cases relating to easements. The argument failed. Viscount Caldecote CJ explained the difference: “A purchaser of land over which there is a right in the nature of an easement does not necessarily want to interfere with the easement. If and when he does interfere with it, the compensation is to be paid in respect of the injury suffered by the person entitled to the easement. It is not a case of the acquisition of the easement, but only of that of the servient tenement. The option to purchase in the present case is wholly different. It seems to me that at the moment at which the Minister takes the freehold he must also take the claimant’s interest, because otherwise his purchase of the freehold would not serve his purpose.” ( p 249)

[9]As will be seen, that passage seems to me to point the way to a straightforward answer to the present case.

General approach

[10]The tribunal was invited to approach the analysis by reference to the history of the legislation, or (in the reported words of Mr Roots QC for the company: LT para 10):

“... by considering the evolution of the statutory provisions from the Lands Clauses Act 1845, through the Acquisition of Land (Authorisation Procedure) Act 1919 to the present regime, which is to be found in the Lands Tribunal Act 1949, the Land Compensation Act 1961 and the Compulsory Purchase Act 1965.”

Consistent with this approach, the list of authorities referred to in argument extended to sixty-two, spanning some 160 years, of which half were referred to in the decision. In a similar spirit, Mr Barnes QC and Mr Denyer-Green for the appellants before us have relied on an 80-page “Outline Argument”, containing a detailed analysis of most of the cases referred to below.

[11]While gratefully acknowledging the expertise and industry shown by this work, and accepting that the issues before the Tribunal were somewhat wider, I see a danger of overcomplicating the task. The Compulsory Purchase Act 1965 was designed to modernise the 19th C law..:

“An Act to consolidate the Lands Clauses Acts as applied by Part I of Schedule 2 to the Acquisition of Land (Authorisation Procedure) Act 1946, and by certain other enactments, and to repeal certain provisions in the Lands Clauses Acts and related enactments which have ceased to have any effect.”

The opportunity was also taken to update the somewhat archaic language and arrangement of the equivalent 1845 Act provisions.

[12]The correct approach to a consolidation statute was explained by the House of Lords in Farrell v Alexander

[1977] AC 59

. Lord Wilberforce said:

“I would agree and endorse the principle that it is quite wrong that, in every case where a consolidation Act is under consideration, one should automatically look back through the history of its various provisions, and the cases decided upon them, and minutely trace the language from Act to Act… In recent times, because modern statutes have become so complicated, the courts myself included… rather too easily accept this process, whether under persuasion of counsel or from their own scholarly inclinations. But unless the process of consolidation, which involves much labour and careful work, is to become nothing but a work of mechanical convenience, I think that this tendency should be firmly resisted; that self-contained statutes, whether consolidating previous law, or so doing with amendments, should be interpreted, if reasonably possible, without recourse to antecedents, and that the recourse should only be had when there is a real and substantial difficulty or ambiguity which classical methods of construction cannot resolve. ”

(p 72H-73C) These comments seem particularly apt in the present context. It is notorious that the compulsory purchase legislation is in many respects complex and obscure, but the courts should do their best to simplify where possible (see Waters v Welsh Development Agency

[2004] 1 WLR 1304

para 4, per Lord Nicholls).

[13]Accordingly, in my view, the correct approach is to look for an answer in the relevant provisions of the modern statutory law, adopting a purposive approach to interpretation. Recourse to the earlier legislative history and case-law may be required, but only so far as necessary to resolve any real doubts or ambiguities. We should also keep in mind the general objects of the legislation, which are to ensure, on the one hand, that compulsory powers are available if needed to acquire land for public projects and are fairly exercised, and, on the other, that those whose land is taken are properly compensated.

The statutory provisions

[14]It is convenient to start by setting out the provisions of the modern law which are necessary to understand the tribunal’s reasoning and the submissions before us:

[15]Compulsory Purchase Act 1965: “5 Notice to treat, and untraced owners(1) When the acquiring authority require to purchase any of the land subject to compulsory purchase, they shall give notice (hereafter in this Act referred to as a “notice to treat”) to all the persons interested in, or having power to sell and convey or release, the land, so far as known to the acquiring authority after making diligent enquiry. … 6. Reference to Lands Tribunal. If a person served with a notice to treat does not within twenty-one days from the service of the notice state the particulars of his claim or treat with the acquiring authority in respect of his claim, or if he and the acquiring authority do not agree as to the amount of compensation to be paid by the acquiring authority for the interest belonging to him, or which he has power to sell, or for any damage which may be sustained by him by reason of the execution of the works, the question of disputed compensation shall be referred to the Lands Tribunal 10 Further provision as to compensation for injurious affection (1) If any person claims compensation in respect of any land, or any interest in land, which has been taken for or injuriously affected by the execution of the works, and for which the acquiring authority have not made satisfaction under the provisions of this Act, or of the special Act, any dispute arising in relation to the compensation shall be referred to and determined by the Lands Tribunal.

(2) This section shall be construed as affording in all cases a right to compensation for injurious affection to land which is the same as the right which section 68 of the Lands Clauses Consolidation Act 1845 has been construed as affording in cases where the amount claimed exceeds fifty pounds.” 22 Interests omitted from purchase (1) If after the acquiring authority have entered on any of the land subject to compulsory purchase it appears that they have through mistake or inadvertence failed or omitted duly to purchase or pay compensation for any estate, right or interest in or charge affecting that land the acquiring authority shall remain in undisturbed possession of the land provide that within the time limited by this section – (a) they purchase or pay compensation for the estate, right or interest in or charge affecting the land, and (b) they also pay to any person who may establish a right to it full compensation for the mesne profits, and the compensation shall be agreed or awarded and paid (whether to the claimants or into court) in the manner in which, under this Act, it would have been agreed or awarded and paid if the acquiring authority had purchased the estate, right, interest or charge before entering on the land, or as near to that manner as circumstances admit. (2) …

(3) The time limited by this section shall be six months after the acquiring authority have notice of the estate, right, interest or charge or, if it is disputed by the acquiring authority, six months after the right to the estate, right, interest or charge is finally established by law in favour of the claimant.

(4) In assessing compensation under this section the value of the land, and of any estate or interest in the land, or any mesne profits of the land, shall be taken to be the value at the time when the acquiring authority entered on the land, and without regard to any improvements or works made in or upon the land by the acquiring authority, and as though the works had not been constructed.” (a) they purchase or pay compensation for the estate, right or interest in or charge affecting the land, and (b) they also pay to any person who may establish a right to it full compensation for the mesne profits,

[16]Land Compensation Act 1961:

“1 Tribunal for assessing compensation in respect of land compulsorily acquired Where by or under any statute (whether passed before or after the passing of this Act) land is authorised to be acquired compulsorily, any question of disputed compensation ... shall be referred to the Lands Tribunal and shall be determined by the Tribunal in accordance with the following provisions of this Act.”

Overview

[17]If one takes these provisions at face value, a reasonably clear scheme emerges: i) Once the compulsory purchase order has been confirmed, the authority must serve notice to treat in respect of the land it wishes to acquire; ii) For that purpose, the authority must “diligently” investigate the interests in the land, and serve notice to treat on all those found to be so interested; iii) If having entered the land, it discovers interests which had been overlooked, it can remain in possession if it purchases or pays compensation (with mesne profits) for those interests; compensation is assessed on the basis of values at the date of entry; iv) The time-limit for so regularising the position is six months from the date when the right of the claimant has been finally established; v) If the authority fails to take steps necessary to regularise the position, it has no lawful right to remain in possession; vi) Any question of disputed compensation is to be referred to and determined by the Lands Tribunal.

[18]At first sight, these provisions seem to fit the present case. The Council served notice to treat on Blue Circle, which it understood to be the owner of the relevant land. Although it was aware of the Company’s claims, its inquiries had failed to satisfy it of their validity. It was and is entitled to wait until the dispute has been finally settled before regularising the position. In the meantime, the land having been compulsorily taken, there is a dispute over both entitlement and amount, which either party is entitled to refer to and have determined by the tribunal.

[19]Mr Barnes’ objections to this simple scheme are in summary three: i) The Council had a discretion under section 5 to decide which interests in the land were to be acquired, and it was not bound therefore to acquire the claimants’ interests, even if valid; the right to statutory compensation could not arise unless and until the Council exercised that discretion by serving notice to treat; ii) Section 22 does not create a right to compensation, if the Council chooses not to take advantage of it, which they have not done and do not intend to do; iii) Section 10 is concerned solely with injurious affection where no land is taken, and it gives no independent right to make a claim for statutory compensation for land taken;

[20]It will be necessary to examine these arguments in detail. However, I say at the outset that I approach them with some scepticism. Having obtained and used compulsory powers to acquire the land necessary for the road, the Council should not be surprised if it has to pay statutory compensation. It is entitled of course to question the legal rights on which the claim is based, and the amount of the claim. But, at least at first sight, it seems artificial and unattractive that, even if the legal rights are established, it should be able to avoid the statutory claim and leave the claimants to their rights at common law (on the basis, as it must be, that it is content to retain possession of their interests unlawfully).

[21]Further, it was not explained to us what benefit this approach is expected to give the Council in practical terms. We must assume (since otherwise the appeal would have no purpose) that the Council believes that the measure of damages at common law will be less onerous than statutory compensation, or perhaps that the common law will offer some procedural advantage (for example, a limitation defence) not available under the statute. However, if that belief is sound, it seems to imply that the Council is seeking to take advantage of its own wrong. The court must, if possible, lean towards an interpretation which avoids that consequence.

[22]This artificiality is most striking in the context of Mr Barnes’ argument on section 22. He accepts, as I understand it, that, if it is ultimately found that the Company did have compensatable interests which entitled them in principle to notice to treat, section 22 would provide the Council with a means of regularising the position. However, he asserts that, even in that situation, it was and is open to the Council to choose to do nothing about them.

[23]This is put most clearly in his “Outline Argument”: “We mention section 22 of the 1965 Act for the purposes of completeness but it is submitted that it has no further effect on the present issue. Although the Council at the date of the service of notice to treat on Blue Circle were not aware of any interests vested in the Claimants the case for the Council is that, even if they had been aware of such interests, they would not have served notice to treat on the Claimants, and, when they were made aware of the alleged existence of those interests, they still did not serve notice to treat or proceed to acquire those interests. It would, in theory, still be open to the Council in reliance on section 22(3) of the 1965 Act to acquire the interests of the Claimants if and when their interest is finally established by law. Such a date would presumably arise if the Lands Tribunal determined that the interests which they allege are held by them are indeed so held but we make it clear that it is the present intention of the Council not to serve notice to treat on the Claimants even in that event....” (para 33, emphasis added)

[24]Although this is stated to be the Council’s position, no explanation is given as to how, acting reasonably as a public authority must do, it could properly resist the Company’s claim once its entitlement is established.

[25]Of the authorities the closest to providing support for Mr Barnes’ approach is Martin v. London, Chatham and Dover Railway Co (1866) LR 1 Ch App 501. The landowner held a leasehold interest, over which he had created an equitable mortgage by deposit of deeds with the claimants, who were bankers. The railway company had served notice to treat on the owner, not the mortgagees, but they had deposited in Court a sum in respect of compensation. It was held that the railway company had acquired the equity of redemption in the land but not the interest of the bank as mortgagees.

[26]The Lord Chancellor held that notice to treat should have been served on the equitable mortgagees, but, that not having been done, they were not bound to claim compensation under the Act (p 505-6):

“I think they [the bankers] stand in this position. They are equitable mortgagees. No proceedings have been duly taken by any person under the statute to deprive them of their rights as equitable mortgagees; and to those rights they are therefore entitled as if nothing had been done. That is the right which I think they retain... Therefore I think... that the plaintiffs are entirely wrong in so much of their prayer as asks for relief upon the footing of their being entitled to some relief under the Act of Parliament, for the relief they are entitled to is the relief which they are entitled to because they are not affected by the Act of Parliament. The relief which they are entitled to, in my opinion, is the common relief of an equitable mortgagee by deposit...”

(p 506-8)

[27]Mr Barnes relies on this case as showing that an acquiring authority may deliberately omit to serve notice to treat on persons known to them to have an interest in the land acquired, and that, if they do so, the result is that their interests are unaffected, and their rights are governed by the common law.

[28]In my view, the case does not lend any support to Mr Barnes’s argument. The facts were very different and section 22 (or its predecessor) was not under discussion. More particularly: i) As the tribunal pointed out (LT 49), the Chancellor did not hold that the company had been entitled as a matter of deliberate choice not to serve notice to treat on the mortgagees so as to improve their financial position. On the contrary, he had earlier observed that it was “clearly the duty of the company to have given notice... to the mortgagees as persons interested...” The issue for him was the appropriate remedy in circumstances where it was “clear they did not take the proper course” (p 505). ii) The rights of the equitable mortgagees in that case did not as such necessarily prejudice achievement of the statutory purpose. Mr Barnes accepts that as equitable mortgagees they had no immediate right to possession. It was always open to the company, as owners of the equity of redemption, to bring their interest to an end by paying off the capital and interest. Their interest was quite different in its implications from an option to purchase (such as claimed in this case), exercise of which could have made completion of the scheme impossible.

The arguments

[29]Against that background, I turn to the detail of the arguments summarised above, and the tribunal’s response to them. The tribunal held, first, that while the council had a discretion under section 5 as to which area of land it wished to acquire pursuant to the compulsory purchase order, it was under a statutory duty to acquire all the interests in that land; secondly, that section 22 was for the protection of the authority, and could not be invoked by the claimant if the authority chose not to use it; but that, thirdly, the company could rely on section 10 to make its claim to the tribunal.

Section 5

[30]The tribunal’s conclusion on section 5, based on the wording of the section and a review of the authorities, was: “... that section 5(1) means what it says. Where the acquiring authority require to purchase any of the land subject to compulsory purchase they must serve with notice to treat all of the persons interested in the land. They have no discretion to omit an interest for this purpose. It would indeed be unjust if they could omit such an interest.” (LT35)

[31]Mr Barnes criticises this conclusion, because it fails to take account of the statutory definition of “land” which, in the context of an acquisition under the Highways Act 1980, includes “an interest in land” (1980 Act s 328(1)). Accordingly, he says the authority’s discretion under section 5 extends not just to the physical extent of the land required for the scheme, but also to the identity of the interests to be acquired.

[32]I find it unnecessary to resolve this issue as one of general law, or to look beyond the facts of this case. The test under section 5 is what is “required” for the scheme, and in determining what was required the authority had to act reasonably. The area of land needed was settled by the Council’s acquisition of the Blue Circle land. There could be no serious dispute that it needed also to acquire or secure the release of any options to purchase owned by third parties. Otherwise there would be nothing to stop the third parties at any time exercising their options to acquire the land, and then suing for trespass, thus bringing to a halt the construction or operation of the road, to a halt. In other words, as in Oppenheimer, they have exercised their choice by acquiring the freehold, and must be taken at the same time to have acquired the claimant’s option to purchase it “because otherwise (their) purchase of the freehold would not serve its purpose”.

Section 22

[33]The tribunal explained its reasoning on section 22 as follows: “Section 22 is in our judgment plainly there for the protection of the acquiring authority. It is for them to take advantage of its provisions after they discover that through mistake or inadvertence they have failed to acquire the claimant’s interest. If (as in the present case and in the case of the minerals below formation level in Davidson’s Trustees) they do not make a mistake but simply do not intend to acquire the interest, the section has no application. It does not enable a claimant, whose interest has been omitted, to initiate a claim for compensation. In Caledonian Railway the promoters had throughout evinced an intention of relying on section 117, but, as the dicta in the House of Lords suggested, it was necessary for the claimants to make a claim in order to get compensation proceedings on foot. That was the context of what Lord Halsbury and Lord Ashbourn said, and their words do not carry the implication that a claimant could make a claim under section 117 where the acquiring authority were not relying on it.” (LT41)

[34]Thus on this point the tribunal accepted Mr Barnes’ argument that the section was of no assistance because its operation was in the hands of the Council. This view was derived both from the wording of the section, and from their interpretation of the reasoning in two linked Scottish cases (in which the equivalent of section 22 was section 117 of the relevant Scottish statute). They were Davidson’s Trustees v. Caledonian Railway Company (1894) 21 R 1060 (Court of Session) and Caledonian Railway Company v. Davidson

[1903] AC 22

(House of Lords).

[35]In my view, the Scottish cases contradict, rather than support, the tribunal’s approach. The facts were somewhat unusual, but a brief outline is sufficient. In 1874 Allan had acquired from the Davidson family a piece of land containing freestone, but Davidson had reserved the right to work the stone on payment of a consideration. The land was compulsorily acquired to build a railway. The railway company served notice to treat on Allan but not Davidson. It then took possession and began to build the railway, removing stone in the process. The two cases arose out of the same underlying facts. A distinction was drawn between stone above the formation level of the railway which the company had always intended to take, and the stone below that level, which it had not intended to take, and initially denied having taken. The first case concerned Davidson’s claim for damages for trespass in respect of stone taken below the formation level. The company sought to rely on section 117 to allow it to retain the stone. However, its evidence was that it had not intended to take stone below that level, and that anything taken was “very trifling” and taken “solely because of the bad character of the strata at the particular point” (p 1062). It was held by the Court of Session that, since it had never intended to take that stone, the failure to serve notice was not due to “mistake or inadvertence” within the section.

[36]The second case, which concerned the stone from above the formation level, reached the House of Lords. It was accepted that the company could in principle rely on the section, but the main issue was whether it was too late for the company to invoke the section, on the basis that six months had elapsed since the Claimant’s right to the stone had been determined in the first case. It was held that, since the first case had been specifically confined to stone below the formation level, the decision was not a final determination of the rights in respect of stone above that level. In addition, in the leading speech, Lord Halsbury LC held that it had been the claimant’s obligation to initiate the process by making a claim, and that not having done so it could not rely on the company’s failure. As he put it:

“… it was the duty of the claimant to make a claim which it would have been possible for the railway company to satisfy… Surely, as a matter of common sense, a man who want to be paid for something must say what it is that he wants; the railway company might say ‘we will pay you what you ask’; but instead of that, neither party appears to have done anything; and the result is that it is now claimed that the period within which the matter could be settled has elapsed, and the railway company are therefore to be treated as trespassers…. That does not appear to me to be business or common sense…”

(p 29-30) None of the other three members of the House rested his decision on this ground, but Lord Ashbourne (p 32) and Lord Robertson (p 34) expressed provisional agreement.

[37]As appears from the passage quoted above, the tribunal read the first case as analogous to the present because failure to serve notice to treat was not through a “mistake”, but due to the fact that the company “simply did not intend to acquire the interest”, and accordingly the section had no application. The second they distinguished on the grounds that there the promoters had “throughout evinced an intention of relying on section 117”.

[38]I do not with respect agree with their interpretation of the cases on either point. In the first Scottish case, the company had not intended to acquire, and did not need to acquire, the stone below the formation level. In the present case, the Council did need to acquire the options if they existed. Whether it made a “mistake” in not serving notice to treat cannot be determined until the validity of the interests has been established. But, if it is ultimately decided that the options were valid interests, in respect of which notice to treat should have been served, then the council will, as a matter of law (whatever its stated position) have made a “mistake” in not so doing. In the second Scottish case, it is true, the company wished to acquire the stone above the formation level, and therefore, one assumes, would have acquiesced in the operation of section 22 by the claimant. However, I do not see that as a critical point. The more important point is the recognition, that, notwithstanding the statutory wording, it is open to either party to trigger the procedure.

[39]In any event, quite apart from the indications in the second Scottish case, I regard the tribunal’s interpretation as an unnecessarily narrow view of the section. It is true that it is expressed in terms which suggest that it is for the protection of the authority. But it must be read against the background of the authority’s positive duty under section 5 to serve notice to treat in respect of such interests as it requires for its scheme, and the general principle that land is not to be acquired compulsorily without compensation. The implication is that the authority will make use of the section, if and when it becomes apparent that a necessary interest has been wrongly omitted, unless it is willing to give up possession. Where as in this case there is no prospect in practice of the authority giving up possession, I see no reason why the claimant should not take the first step to initiate the process by making a claim and referring it to the tribunal.

[40]Mr Barnes also argued that, even under section 22, the service of notice to treat is an essential trigger to the right to compensation, since otherwise there would be nothing to bring section 6 into play, and therefore no basis for a reference to the tribunal. However, that seems to me to an unduly technical approach. Section 22 provides that compensation is to be assessed and awarded “as it would have been agreed or awarded” if the authority had purchased the interest before entering on the land, or “as near to that manner as circumstances admit”. In other words, it is a deeming provision. It creates a statutory assumption that the correct procedures to acquire the land had been followed before entering; it does not require those procedures to be replicated.

[41]I accordingly would allow the appeal on the grounds that the claimants were entitled to initiate the section 22 procedure, and that this provides a sufficient basis for the tribunal to deal with the matter.

Section 10

[42]Although it is unnecessary to go further for the purpose of this appeal, it may be helpful to comment on the alternative route proposed by the tribunal, in view of the full argument we have heard and the general interest of the point.

[43]There is no doubt that in the modern law, as the heading to section 10 suggests, it has been treated as concerned with compensation, not for land taken, but for injury to other land which is adversely affected by the project (see e.g. Wildtree Hotels Ltd v Harrow LBC

[2001] 2 AC 1

). In his classic judgment in Horn v Sunderland Corp

[1941] 2 KB 26

, p 42-3, Scott LJ went as far as to say that its predecessor had “nothing to do with compulsory acquisition”, adding:

“Whether the words “taken for or” in the second line of section 68 have any meaning or were a mere clerical error, it is unnecessary in the present case to speculate, for it is notorious that section 68 has always been construed as applying only to lands not held with lands taken.”

[44]The tribunal did not accept that view. They were able to refer to five cases between 1850 and 1904 in which it was at least assumed that section 68 would be available, if necessary, to secure compensation for land taken (LT 48-54). Of these only the first, Adams v. London and Blackpool Railway Co. (1850) 2 Mac & G 118, is said to have been a decision to that effect.

[45]It is difficult to do justice to these cases without taking time to set them in the context of the variety of procedures provided by the 1845 Act, many of which have been repealed or become obsolete. In any event, it is not suggested that the cases are binding on us. It is sufficient to take as an illustration the only statement at the highest level, from Tiverton and North Devon Railway Co v Loosemore

(1884) 9 App Cas 480

. The issue decided by the House had nothing to do with the facts of this case, but in the course of this speech Lord Blackburn mentioned section 68 as one the procedural routes available to a claimant:

“It is true that s 68 gives the landowner, whose land is thus taken without paying the price, very stringent powers for forcing on the assessment of the price; and I suppose a willing seller would generally avail himself of those powers; I see nothing, however, in the Act to prevent his having recourse to the powers given by the earlier sections”

(p 198)

[46]That is a clear acknowledgement that, at least in the 19th C, the role of section 68 was not as limited as Scott LJ suggested. On the basis of those cases, the tribunal concluded that this wider role continued in the modern law: “That the provision applies where ‘the acquiring authority have not made satisfaction under the provisions of this Act, or of the special Act’ makes clear its function, which is to sweep up claims for compensation for which the other provisions have not provided and to enable a claimant to have them assessed. If an acquiring authority have failed to serve notice to treat on every interest as required by section 5 and have entered on the land, section 10 provides the owner of an interest who has not been served with notice to treat with the means of claiming compensation for the value of his interest and for consequential loss.” (LT59)

[47]If it were necessary to do so, I would be inclined to agree with the tribunal’s interpretation of the section. I am untroubled with respect by the apparent conflict with the statement by Scott LJ. The procedural reforms of the Acquisition of Land Act 1919 (in which he had played a major part) may well have largely removed the practical need for a “sweep-up” provision for land taken. In its recent reports on land compensation, the Law Commission adopted a similarly limited approach (see Law Commission CP 165 para 9.1ff). But that simply reflects the fact that there appears to have been no reference to the wider use of section 68 or section 10 in any decided case since 1904.

[48]A stronger argument against the wider role is found in the other parts of the section as it appears in the 1965 Act. Subsection (2), which ties the operation of the section to the interpretation of section 68 in relation to injurious affection, says nothing about a wider role. It is true that it does not say in terms that the section is “only” concerned with compensation for injurious affection, but if a wider role was intended some specific reference might have been expected. That impression is reinforced by the heading to the section, which refers only to injurious affection. On the other hand, as the tribunal pointed out, such an interpretation gives no effect to the opening words of the section which refer in terms to a case where land “has been taken” and satisfaction has not been made as required by the Act. While it was possible for Scott LJ to speculate that they were the result of a “clerical error”, that is more difficult in the context of the 1965 Act. Their retention, as part of the consolidation, suggests that the draftsman was at least not satisfied that they had no substantive effect.

Conclusion

[49]In this case, the essential question to my mind is whether the Council’s action has resulted in a compulsory taking of compensatable interests of the Company. If it is found that the Company did have compensatable interests, in the form of, or analogous to, options to purchase over the land compulsorily acquired for the road, then (as in Oppenheimer) it is difficult to see realistically how one can avoid the conclusion that they also were “taken” in pursuance of the statutory powers. If that is the conclusion, then they are in principle entitled to statutory compensation.

[50]Left to myself I would have preferred to avoid relying on detailed analysis of sections 22 or 10, still less of their predecessors and the sometimes confusing case-law derived from them. Such arguments seem to me to fall into the trap of subordinating substance to procedure. In the modern law, I would be inclined to the view that section 1 of the 1961 Act provides ample authority for referring any genuine claim for statutory compensation to the Lands Tribunal, whether it concerns entitlement or amount. I note also that the Lands Tribunal’s jurisdiction is expected shortly to be transferred to a new “Lands Chamber” in the Upper Tribunal, under the Tribunals, Courts and Enforcement Act 2007. When this happens the Chamber will, in appropriate cases, be able to call on the expertise of High Court judges to assist in the determination of complex issues of title, such as appear to arise in this case.

[51]However, I am content to determine the case on the basis of the arguments as presented to us. I reach the same ultimate conclusion as the tribunal for the reasons given above. I find it unnecessary and undesirable to answer the preliminary questions in the terms as formulated by them (or by the parties). It is sufficient simply to order that all issues relating to the entitlement to or amount of compensation pursuant to the Company’s claim be remitted to the tribunal for determination in the light of this judgment.

Lord Justice Keene :

[52]I agree.

Lord Justice Ward :

[53]I also agree.